It was a mixed performance for Zenith Bank Plc as shown by its score-card for the nine months ended September 30, 2020, showing marginal growth in gross earnings, driven by the improved growth in trading income, other income, after the slowdown in interest and similar income, net fee, and commission income, even as impairment charge climbed almost N6bn in what may not be unconnected with the impact of the lockdown to check the spread of the Coronavirus pandemic.
Specifically, gross earnings for the period stood at N508.975bn, up from N491.268bn, while net profit rose to N159.315bn from N150.723bn, helped by the N7.492bn or 29.43% drop in income tax expense from N25.46bn in the nine months of 2019, to N17.968bn. This represented Earnings Per Share of N5.09, as against the previous N4.80 each.
Of the gross earnings, the Nigerian operations contributed N441.593bn or 86.76% of the group’s total revenue, from the previous N425.818bn or 86.67% in 2019; followed by the N53.941bn or 10.59% from its African operations, which was flat compared to the previous N53.026bn or 10.79%; and N17.816bn, or 3.5% from Europe, representing a drop from the prior third-quarter’s N18.012bn or 3.66%.
A breakdown of the earnings for the period showed that interest and similar income dropped from N321.938bn to N318.82bn; interest and similar expense dropped to N93.641bn from N107.311bn; resulting in net interest income of N225.179bn, compared to the N214.627bn reported in the similar period of 2019.
Loan impairment charge rose to N25.108bn, from N18.259bn, resulting net interest income after impairment charge of N200.071bn, a marginal increase over the N196.368bn.
Fee and commission income stood at N75.79bn from N86.421bn, with credit related fees dropping to N13.106bn from N14.262bn; current account maintenance climbed to N17.045bn from N15.821n; income from financial guarantee contracts issued jumped from N2.6bn to N5.121bn. Fee on electronic products tumbled from N35.324bn in the first nine months of 2019, to N18.324bn; foreign currency transaction fees and commission fell to N1.51bn from N2.385bn; and asset based fees improved from N5.925bn to N7.031bn. Foreign withdrawal charges improved from N4.283bn to N5.834bn; while commission on agency and collection services stood at N7.017bn from N3.409bn; among others. Net fee and commission income dropped from N73.847bn to N59.123bn; and trading income climbed to N89.817bn from N66.856bn.
Other income rose from N16.053bn to N24.548bn; boosted by the N20.573bn foreign currency revaluation gain, which rose from N13.473bn; and the N2.4568bn loan recoveries, compared to nil in the prior nine months.
Depreciation of property and equipment increased to N18.733bn from N14.907bn; amortisation of intangible assets was flat at N2.375bn, as against N2.287bn; personnel expenses climbed from N57.065bn to N59.925bn.
Operating expenses jumped to N115.243bn from N102.682bn, the lion’s share of which was the N30.948bn payment in AMCON levy, up from N28.654bn; information technology cost jumped from N7.288bn to N14.881bn; fuel and maintenance cost rose from N8.155bn, up from N12.029bn; and deposit insurance premium (NDIC) rose from N9.674bn to N10.365bn; among others.
Profit before tax, therefore, stood at N177.283bn from N176.183bn.
A breakdown of the net profit showed that N140.919bn was earned from the group’s Nigerian business, representing 88.45% of total, compared to N132.347bn or 87.8%; with the African business accounting for N17.931bn or 11.25%, as against N16.24bn, or 10.77%; and N4.465bn, or 2.73%, up from N6.136bn or 4.07% in the previous nine months.
On the balance sheet, total assets improved by N1.994tr or 33.37%; boosted by loans and advances, which grew from N2.043tr to N2.71tr; just as total liabilities climbed by N1.832tr or 35.88% to N6.938tr from N5.106tr. The lion’s share was the N5.224tr customer deposits, improving by N1.272tr or 32.21%. Shareholders’ fund grew by N162.44bn or 18.63%